The Managers of Conch, Inc

question 58

Multiple Choice

The managers of Conch, Inc. want to determine the most accurate allocation of support department costs to operating departments. To make this allocation, the accounting department has collected the following data: Services Provided By
Computer Cafeteria
Direct costs $55,000 $35,000
Service provided to:
Computer department ---- 15%
Cafeteria 10% ----
Operating department 1 50% 40%
Operating department 2 40% 45%
If the reciprocal method is used, the equation representing the total cost of the cafeteria is:

• A)Cafeteria = $35,000
• B)Cafeteria = $35,000 + (0.15 × computer cost)
• C)Cafeteria = $35,000 + (0.10 × computer cost)
• D)Cafeteria = $35,000 + 0.10 × ($55,000 + 0.10 × computer costs)

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Definitions:

Mitochondrion

Double-membraned organelle that produces ATP by aerobic respiration in eukaryotes.

Aerobic Respiration

A metabolic process that uses oxygen to convert glucose or other organic molecules into energy (ATP), carbon dioxide, and water.

Electrons

Negatively charged subatomic particles orbiting the nucleus of an atom.

Citric Acid Cycle

A key metabolic pathway that takes place in the mitochondria, involving the oxidation of acetyl-CoA to carbon dioxide and ATP production, also known as the Krebs cycle.